The potential of blockchain technology for agribusiness

Agribusiness is one of the areas that has the greatest potential for improvement through the application of blockchain.

Through this channel, we covered the various applications of the blockchain. We have seen that areas such as finance, inventory management, supply chain, gaming, sports, healthcare, and insurance are undergoing revolutionary transformations.

But in comparison, the agricultural sector is still far behind in this wave of change, despite its huge potential for financial gain and improvements in operations.

Agriculture is one of the basic areas of human production, and it has existed since prehistoric times. The way we grow our food has been gradually modified over time, according to the needs of each region.

Advances in science, fertilizers and agrochemicals, and our understanding of soil models and large farms have enabled the industrialization of traditional agricultural processes.

The use of data technologies in agribusiness

Currently, the agricultural sector is benefiting from ICT, using information data in the face of demands for increased production and sustainability. The use of these resources improves the efficiency of data collection, storage, analysis and use in agriculture. Some of the application cases are:

  • remote sensing data of soil conditions, which aids in crop management;
  • Mobile devices such as smartphones reduce the cost of information and open farmers’ access to markets and financial institutions;
  • The application of GPS technology with maps and satellite images that allows the management and inspection of farms and agricultural machinery.

The gradual use of information technology has led to significant advances in the profitability of agribusiness. However, there is an inevitable central problem associated with these developments: data acquisition and use through bias bias, which can benefit the vested interests of those who control the subject.

This happens, for example, when stakeholders participate in a multi-criteria decision and are influenced by the interests of the organization they represent. The solution to such problems comes through blockchain technology.

Possibility of using blockchain in agribusiness

Recorded data is shared through blockchains on the P2P network, which act like a read-only ledger. They create permanent records of data generation, transactions, and consumption, so that each new record needs to be validated by network nodes before sequencing is configured.

This architecture also prevents this data from being modified, making it tamper-proof.

In the agricultural sector, the application of this technology brings a series of benefits, among which are:

  • Feed the above problems of reliability and bias in the collection, use, and transmission of data. This enables transparent decisions to be made based on this information;
  • Implementation of the blockchain eliminates the participation of intermediaries such as banks, financial institutions, and vendors. It decentralizes the production chain and allows direct P2P transactions, which significantly reduces costs and benefits producers and consumers;
  • In supply chain management, the use of blockchain allows to trace and confirm the origin, quality and path traced by food products, which is of paramount importance to consumers, governments, etc. It also allows detection of frauds and problems in real time with the help of smart contracts.

Additional apps

There are many startups that are launching innovations for the agricultural industry, with tailored solutions for transactions, supply chain management and product origin tracing. The estimated market value of agricultural blockchain innovations, in 2017, was $41.2 million.

This figure is expected to rise to US$430 million by 2023, with an average growth rate of around 47.8% per year.

The development of new innovative solutions can provide more possibilities for modernization in agribusiness. Some examples under development are:

farm insurance: Operations involving farm and grower insurance companies are very complex and bureaucratic, many of which are prone to fraud and time-consuming.

The use of systems with smart contracts on the blockchain can facilitate this in two ways: automating the procedures for implementing insurance and recovering values ​​in the event of losses, and enabling automatic verification of recovery conditions, such as status history • weather data and remote sensing.

smart farming: smart farming, or smart farming, comes from the marriage between agribusiness and the Internet of Things (IoT). This includes technological developments such as machine learning and devices with sensors for data collection and analysis, as well as the use of drones and other unmanned aerial vehicles.

This type of resource includes the need for a unified, efficient and automated management and security system. Blockchain systems are currently the most secure and efficient solution on the market.

Conclusion

Blockchain technology promises to take agribusiness a step further, automating processes and lowering costs. These new resources must be carried out especially on large farms, which produce goods for world trade.

This year and beyond, we will see a sharp growth in the development of blockchain applications for agriculture.

About the author

Al-Kadmani is a knight He holds a BA in Business Administration from Tishreen University in Syria and an MBA from Edinburgh Business School in Scotland. Brazilian naturalized. He works as Business Development Manager in Brazil at Kucoin.

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